LAWYERS COOPERATIVE PUBLISHING COMPANY v. PERFECTO A.

TABORA

FACTS

Perfecto Tabora bought from the Lawyers Cooperative Publishing Company a complete
set of AmJur, plus a set of AmJur, General Index.

The contract provides that: “Title to and ownership of the books shall remain with the
seller until the purchase price shall have been fully paid. Loss or damage to the books
after delivery to the buyer shall be borne by the buyer.”

Tabora made a partial payment of P300.00, leaving a balance of P1,382.40. The books were
delivered and received for by Tabora. On the same day, a fire broke out, burning down
Tabora’s law office and library. Tabora immediately reported it to LCPC. The company
replied and as a token of goodwill it sent to Tabora free of charge 4 Philippine Reports
volumes.

As Tabora failed to pay the monthly installments agreed upon, LCPC filed an action to
recover of the balance.

According to Tabora, title to and the ownership of the books shall remain with the seller
until the purchase price shall have been fully paid, so LCPC should bear the loss. Even
assuming that the ownership was transferred to Tabora, he should not answer for the loss
due to force majeure.

ISSUE:

Whether or not Tabora should bear the loss?

HELD:

Yes.

The general rule is that the loss of the object of the contract of sale is borne by the owner or
in case of force majeure the one under obligation to deliver the object is exempt from
liabilit. This is not applicable here as the contract provides that loss or damage after
delivery shall be borne by the buyer.
The defense of force majeure also failed. The rule only holds true when the obligation
consists in the delivery of a determinate thing and there is no stipulation holding
him liable even in case of fortuitous event. This is not present in this case. The obligation
is pecuniary in nature, and the obligor bound himself to assume the loss after the
delivery.

G.R. No. L-21263 April 30, 1965

LAWYERS COOPERATIVE PUBLISHING COMPANY, plaintiff-appellee,

Paredes, Poblador, Cruz and Nazareno for plaintiff-appellee.

BAUTISTA ANGELO, J.:

On May 3, 1955, Perfecto A. Tabora bought from the Lawyers Cooperative Publishing
Company one complete set of American Jurisprudence consisting of 48 volumes with
1954 pocket parts, plus one set of American Jurisprudence, General Index, consisting of
4 volumes, for a total price of P1,675.50 which, in addition to the cost of freight of P6.90,
makes a total of P1,682.40. Tabora made a partial payment of P300.00, leaving a balance
of P1,382.40. The books were duly delivered and receipted for by Tabora on May 15,
1955 in his law office Ignacio Building, Naga City.

In the midnight of the same date, however, a big fire broke out in that locality which
destroyed and burned all the buildings standing on one whole block including at the
law office and library of Tabora As a result, the books bought from the company as
above stated, together with Tabora's important documents and papers, were burned
during the conflagration. This unfortunate event was immediately reported by Tabora
to the company in a letter he sent on May 20, 1955. On May 23, the company replied
and as a token of goodwill it sent to Tabora free of charge volumes 75, 76, 77 and 78 of
the Philippine Reports. As Tabora failed to pay he monthly installments agreed upon on
the balance of the purchase price notwithstanding the long time that had elapsed, the
company demanded payment of the installments due, and having failed, to pay the
same, it commenced the present action before the Court of First Instance of Manila for
the recovery of the balance of the obligation. Plaintiff also prayed that defendant be
ordered to pay 25% of the amount due as liquidated damages, and the cost of action.
Defendant, in his answer, pleaded force majeure as a defense. He alleged that the books
bought from the plaintiff were burned during the fire that broke out in Naga City on
May 15, 1955, and since the loss was due to force majeure he cannot be held responsible
for the loss. He prayed that the complaint be dismissed and that he be awarded moral
damages in the amount of P15,000.00.

After due hearing, the court a quo rendered judgment for the plaintiff. It ordered the
defendant to pay the sum of P1,382.40, with legal interest thereon from the filing of the
complaint, plus a sum equivalent to 25% of the total amount due as liquidated
damages, and the cost of action.

Defendant took the case to the Court of Appeals, but the same is now before us by
virtue of a certification issued by that Court that the case involves only questions of law.

Appellant bought from appellee one set of American Jurisprudence, including one set
of general index, payable on installment plan. It was provided in the contract that "title
to and ownership of the books shall remain with the seller until the purchase price shall
have been fully paid. Loss or damage to the books after delivery to the buyer shall be
borne by the buyer." The total price of the books, including the cost of freight, amounts
to P1,682.40. Appellant only made a down payment of P300.00 thereby leaving a
balance of P1,382.40. This is now the import of the present action aside from liquidated
damages.

Appellant now contends that since it was agreed that the title to and the ownership of
the books shall remain with the seller until the purchase price shall have been fully
paid, and the books were burned or destroyed immediately after the transaction,
appellee should be the one to bear the loss for, as a result, the loss is always borne by
the owner. Moreover, even assuming that the ownership of the books were transferred
to the buyer after the perfection of the contract the latter should not answer for the loss
since the same occurred through force majeure. Here, there is no evidence that appellant
has contributed in any way to the occurrence of the conflagration.1äwphï1.ñët

This contention cannot be sustained. While as a rule the loss of the object of the contract
of sale is borne by the owner or in case of force majeure the one under obligation to
deliver the object is exempt from liability, the application of that rule does not here
obtain because the law on the contract entered into on the matter argues against it. It is
true that in the contract entered into between the parties the seller agreed that the
ownership of the books shall remain with it until the purchase price shall have been
fully paid, but such stipulation cannot make the seller liable in case of loss not only
because such was agreed merely to secure the performance by the buyer of his
obligation but in the very contract it was expressly agreed that the "loss or damage to
the books after delivery to the buyer shall be borne by the buyer." Any such stipulation
is sanctioned by Article 1504 of our Civil Code, which in part provides:
 (1) Where delivery of the goods has been made to the buyer or to a bailee for the
buyer, in pursuance of the contract and the ownership in the goods has been
retained by the seller merely to secure performance by the buyer of his
obligations under the contract, the goods are at the buyer's risk from the time of
such delivery.

Neither can appellant find comfort in the claim that since the books were destroyed by
fire without any fault on his part he should be relieved from the resultant obligation
under the rule that an obligor should be held exempt from liability when the loss occurs
thru a fortuitous event. This is because this rule only holds true when the obligation
consists in the delivery of a determinate thing and there is no stipulation holding him
liable even in case of fortuitous event. Here these qualifications are not present. The
obligation does not refer to a determinate thing, but is pecuniary in nature, and the
obligor bound himself to assume the loss after the delivery of the goods to him. In other
words, the obligor agreed to assume any risk concerning the goods from the time of
their delivery, which is an exception to the rule provided for in Article 1262 of our Civil
Code.

Appellant likewise contends that the court a quo erred in sentencing him to pay
attorney's fees. This is merely the result of a misapprehension for what the court a
quo ordered appellant to pay is not 25% of the amount due as attorney's fees, but as
liquidated damages, which is in line with an express stipulation of the contract. We
believe, however, that the appellant should not be made to pay any damages because
his denial to pay the balance of the account is not due to bad faith.

WHEREFORE, the decision appealed from is modified by eliminating that portion